Financial Freezes, Figures and Other Stuff
The NCUA announced its budget increase at the last board meeting much to the dismay of the industry that supports it financially. While some acknowledged additional spending might be necessary to handle problem credit unions and the corporates, others were downright-I'll clean it up-mad.
The day after the board meeting, NAFCU President/CEO Fred Becker sent a letter to the NCUA that "seriously questioned" whether more than $1 million worth of paintings, furniture replacement and bathroom upgrades were 100% necessary at a time when credit unions are so badly hurting. He also pointed out that the NCUA has a higher ratio of examiners to assets than the FDIC, which supervises more complex institutions.
What might help the agency with the budget concerns is President Obama's proposal last week for a two-year federal government employee pay freeze. The FIRREA agencies are not typically required to follow regular government pay guidelines, but the NCUA and others may choose to present a united front with the rest of the government. Chairman Matz is of the same political party as President Obama and may be wise to curry favor with him. The agency isn't confirming anything until details are released by the Office of Management and Budget and the Office of Personnel Management.
It also would not hurt agency relations with credit unions to trim a million or two from the budget. I'm not suggesting the agency should do anything simply to improve relations with the industry it regulates; it just would be a potentially positive byproduct.